Money McBags is the preeminent financial humorist and money maker in the world. While known for his ability to find and invest in undervalued equities, Mr. McBags is also a world class dick joke teller, an aficionado of lovely ladies, and avid reader of books without pictures in them. With... More

4/21/10 Midday Report: You can not stop AAPL, you can only hope to contain them 0 comments

The news today is earnings, earnings, earnings, and Sophie Turner. The markets are inching up after a strong slate of mostly positive earnings reports (not so fast AT&amp;T and GILD). However, before we get to earnings which featured Apple taking other handset makers out to eat, getting them drunk, and then giving them a cleveland steamer as a reminder of their dominance, Greece is back in the news. Investors are worried that Greece may take 45B euros in aid before actually agreeing on the terms which is very TARP-esque of them (one wonders if they are going to use Hank Paulson's preferred contractual device of a napkin to agree to country changing policies). With terms of the aid more open than Joslyn James' anus right before Tiger Woods "sinks a putt," the risk premium on Greek bonds has soared to 512bps which is higher than anything in Greece has gone since Icarus let his ego get the best of him. Concerns remain that Greece may not be able to pay the 8B euro coming due in a month and in a show of support, Greek workers are about to embark on their 3rd 24 hour strike since the crisis began which would be crippling if that weren't somehow still more hours than they typically work in a day. Luckily for them, France is gearing up to loan Greece 6B to 8B euros as part of the aid package. French economy minister Christine Lagard, who in 2009 was named Best Finance Minister in Eurozone by the Financial Times after a stunning rendition of "Mo Money Mo Problems" in the talent portion of the show, tried to calm the fears of a Euro meltdown by opining: "I won’t say Portugal is next in line..." before adding "but I just saw Prime Minister Jose Socrates listing the Iberian Peninsula on Craigslist for "roses." Boooyah!!! Can I get a Quelle Quelle?"

As for earnings, AAPL crushed their quarter with iPhone sales up 130% leading to a 90% increase in profit and a 49% increase in sales. Apple earned $3.33 per share, well above analyst guesses of $2.45 and said they were "shocked" by how well the iPad was selling. Holy fucking shit is it on. Apparently Apple's app for taking over the world is a little too good as their products are selling faster than Adam Smith's invisible hand can fondle unwitting young ladies during New York's Fashion Week. In other earnings news, Morgan Stanley traded the fuck out of some shit (and Money McBags apologizes for getting overly technical there) earning $1.03 per share after one-timers largely because of their sales and trading unit. Book value is up to ~$28 per share and ROEs are creeping back up hitting 13%. Like every other investment bank, revenues and profits were driven by fixed income traders who bought and sold shit we'll never know about, who we can't actually track to see what the fuck they are doing, and who are likely ignoring all but one SEC regulation (and that one of course is to not get high off their own supply). The paper economy lives on, long live made up shit. Also, MCD beat guesses by earning $1.03 per share after one-timers and Money McBags is an owner of this stock because there is huge brand equity for continued international expansion. Operating margins were up 2.2% and same store sales were up 4.2% for the quarter and 5.2% in March driven by 4.2% growth in the US, 5.9% growth in Europe, and 7.9% growth on Mars. MCD is not going to be a high flyer but it offers a nice yield for a franchise that should do well in a world becoming more globalized, even in a down economy.

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